6 characteristics of Real Estate, Different Types of Real Estate

Question 1

What Is Real Estate?

Answer 1

Real property that consists of land and improvements. This includes permanent structures like a home or improvements to the land.

Question 2

6 Characteristics of real estate

Answer 2

1. Both consumption and an Investment Good
2. Fixed Location
3. Unique
4. Durable
5. Large economic unit
6. Government regulations

Question 3

what is a Consumption Good:

Answer 3

providing services(shelter)

Question 4

what is an Investment Good:

Answer 4

the single largest asset for many households, the value of your house to increase

Question 5

Fixed Location

Answer 5

no two homes share the same location, Location is normally determined by access to jobs, specific goods

Access to capital ($) is important. A mortgage is usually required

Implication: Mortgage market conditions influence housing price This can cause real estate markets to be segmented and localized in terms of value

Question 6

Unique

Answer 6

Every property is unique in terms of location, the building and financing

Implication: Uniqueness makes it harder to assess the value

Question 7

Durability

Answer 7

There is no fixed maturity. You can hold real estates for decades

Question 8

Large economic Unit

Answer 8

Access to capital ($) is important. A mortgage is usually required

Implication: Mortgage market conditions influence housing price

Question 9

Government Regulations

Answer 9

The government has extensive regulations through zoning by-laws and building codes

Implication: Governments can impact real estate supply and demand

Question 10

Types of Real Estate Use:

Answer 10

Residential, Commercial , Industrial

Question 11

Tenure (ownership)

Answer 11

Freehold, Tenancy, Condo, Coop, Leasehold

Question 12

Residential Density

Answer 12

Low Density - stand alone home/ semi detached

Medium Density -Townhouse Low rise: 1-4 story
High Rise: 5-9 with manager

High Density - more than ten story’s
located in high population areas

Question 13

Commercial

Answer 13

• Property that is used for business related or income generating purposes

Question 14

Retail: Mixed Use

Answer 14

combination of office, retail and residential

Question 14

Retail: Hospitality

Answer 14

hotel - several floors
Motel - one or two floors
Bed and breakfast - short term lodging

Question 14

Commercial Office Classes:

Answer 14

Class A - Excellent location, high quality tenants

Class B - Good location, Good tenants

Class C - less attractive location, over 20 years of age

Question 15

Retail (malls, stores)

Answer 15

Enclosed malls - large structure, numerous stores and entertainment

Strip Malls - stores arranged in a row all have access to outside

Stand alone - an isolated shop

Question 16

Tenure: Condo

Answer 16

Joint Ownership, you own a unit but share common area space

Question 17

Retail: Other

Answer 17

Health care - hospitals

Question 18

Industrial

Answer 18

Activities including; production, manufacturing, assembly, warehousing, research, storage and distribution

Question 19

Tenure: Freehold

Answer 19

full use and control of property(land & building)

Question 20

Tenure: Tenancy

Answer 20

Only have the occupancy right(ownership belongs to landlord)

Question 21

4 Most Common Tenure

Answer 21

Freehold, Condo, tenancy, Coop

Question 21

Tenure: Coop

Answer 21

Individuals have the right to occupy an apartment but do not have exclusive ownership

Question 22

Tenure: Leasehold

Answer 22

land leased to the homeowner by the land owner (City, Government, First nations reserve lands)